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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Sam Citron who wrote (28009)	4/25/2005 9:05:52 PM
From: Cary Salsberg	Read Replies (1) \| Respond to of 60323

RE: "Cost leadership and differentiation are the building blocks of competitive strategy and SNDK has executed well to enhance and sustain its advantage." Let us start with AMAT. SFAM and IPEC are the leaders in CMP. AMAT builds a CMP tool, gains 80%+ market share, and SFAM and IPEC are gone. NVLS picks up the SFAM/IPEC pieces and attempts to develop a competitive product that will gain significant market share. AMAT to a greater degree and NVLS to a lesser are the only US equipment companies which have shown the ability to enter new niches and develop quality products which dominate the market. These results reflect long term competitive advantages and high entry barriers. This is a far cry from the execution you describe for SNDK. It is not obvious that SNDK will be able to continue to execute based on cost and differentiation. That they have in the past makes it more likely than not, but, in technology, superior execution is not easily maintained long term without competitive advantages. Maybe, you can address the value of their MLC IP. Also, if profit margins fall to close to zero on Flash chips, how much money can SNDK make on their license fees and royalties and their vertical products such as flash cards and MP3 players? Right now, Samsung and Toshiba are the main players, but all DRAM fabs should be allocating production, as needed, between DRAM and Flash. How costly is it for a DRAM player to be licensed to produce Flash?